France’s Groupe PSA announced this week that it has chosen to bring the Peugeot brand back to the U.S. and Canada as part of a 10-year global expansion plan.
The Paris-based group, which made waves locally in 2017 by announcing it had chosen Atlanta for its North American headquarters, sold Peugeot cars in the U.S. before exiting the market in 1991.
Larry Dominique, who leads the group in North America as CEO, said he’s often asked what has changed. The short answer: everything.
“The Peugeot brand is a completely different brand than it was then,” he said, pointing to the company’s expanded product line and financial health evidenced by the earnings report this week where Groupe PSA CEO Carlos Tavares announced that it would be Peugeot carrying the group’s flag back into the U.S. market.
The company announced that sales had risen 19 percent to 74.03 billion euros in 2018, with profit margins across the group jumping to 7.7 percent.
Recent comments from the U.S president notwithstanding, foreign entrants have also gained much more acceptance in the U.S. market, and the American consumer is looking for choice. When Peugeot left 28 years ago, General Motors had 41 percent market share. That’s been shaved to 16 percent, largely by Japanese, Korean and German auto makers.
Mr. Dominique wouldn’t reveal models being considered for market entry, but said it’s a ways off. Peugeot’s global product lineup, which includes everything from tiny “city cars” and all-electric vehicles to eight-seater SUVs and vans, is not his concern. The company is also set to introduce an electrified option for each of its models by 2025.
“Our products in the Peugeot brand are already globally competitive. We have the right products — now it’s a matter of relating the brand in the right way,” Mr. Dominique told Global Atlanta in a telephone interview.
No Hurry
From a branding standpoint, Peugeot made sense for the U.S. for variety of reasons, not least of which is its French pedigree, as well as the positive associations with European-made cars.
A 208-year-old brand, Peugeot is established enough to resonate with older buyers but new enough that it can chart its own course with younger generations, Mr. Dominique told Global Atlanta.
That’s where Groupe PSA has a one-time luxury that automakers with existing market share here don’t enjoy: Waiting.
Mr. Dominique repeatedly emphasized that the company can base its approach on information that gathered gradually, rather than rushing products to market. It’s only time-sensitive commitment is to the transformation plan, which is set to be completed by 2026.
Surveys so far have shown that a major constant in the American auto scene is change — consumers are emphasizing digital engagement, experiences and the confluence of the two. Peugeot surveys with Americans and Canadians have revealed their affinity for brands perceived as providing more than a “tool on their phone.” Names like Chick-fil-A, Starbucks, Anthropologie and others have popped up.
Of course, the comparisons only go so far.
“They’re not buying a $100 shirt. They are buying a $35K car,” he said. “We’re going to spend a lot of time getting to know these people.”
Mr. Tavares reportedly said that cars made for the North American market would be produced either in Europe or China. That could be problematic from a tariff perspective, but again, it’s a long way off. His remarks came days after President Donald Trump took delivery of a U.S. Commerce Department report he had requested on whether auto imports pose a national-security threat.
Still Experimenting With Mobility
One of the aspects of Groupe PSA’s arrival in Atlanta that most excited boosters of the city’s business climate was the way it showcased two of its main strengths — the auto sector and the burgeoning technology industry.
The auto maker chose Atlanta in part because it fit with an unconventionally slow-moving strategy for entering the market: Using technology to test the waters, gathering data on the future of mobility before deciding which products and business models best fit the trends of the day.
Groupe PSA launched in Washington D.C. its Free2Move app, which aggregates available car-sharing providers and other shared mobility services like Bird and Lime scooters and Uber’s Jump bicycles. A separate app, soon to be integrated into the former, provides a Groupe PSA-run car-sharing service, only with GM cars until Peugeot can enter the market.
Free2Move is a standalone business that will be rolled out to other cities — again, in due time.
“I’m not in a hurry until I have a good visibility that we know how to operate with high customer satisfaction,” Mr. Dominique said, declining to say whether Atlanta is among the cities being considered for launch of mobility platforms.
The Atlanta Base
Groupe PSA’s Atlanta headquarters so far consists of a WeWork office at 3172 Peachtree Street that will grow to about 15 people by the end of this year.
The pace of hiring will depend on how aggressive the timeline is for introducing cars into the U.S. The big focus for this year is branding and researching the retail experience.
Mr. Dominique said there’s little appetite for buying and owning property — a departure from brands like Porsche and Mercedes-Benz, who have put massive facilities in the metro area. He did note that he is “pretty committed” to staying within the City of Atlanta when Groupe PSA finds a more permanent home in the metro area.
“One thing we’re not about is owning real estate. It’s not about owning a big building ourselves and putting our name on it, although I wouldn’t mind being in a big building with our name on it,” he said.
Future demand will dictate the size of the Atlanta presence, he added.
“I’m in no hurry. If we’re trying to be a world-class, agile, lean organization, I can’t tell you when I launch cars in X numbers of years if I’m going to need 50 people in my organization or 120. We really don’t know yet. To jump into a more permanent arrangement at this time would be potentially overspending when you don’t need to.”
Behind-the-scenes conversations with ports in Georgia and Florida and other stakeholders around the U.S. and Canada are ongoing, he said.